To report a serious incident to DEM, as required by Section 85(2) of the Petroleum and Geothermal Energy Act 2000, licensees should contact the serious incident reporting hotline on: (08) 8463 6666. For more information please visit the Compliance and Monitoring webpage | DEM-ERD has just released the first “Basin in a Box” data-package covering the Simpson and Pedirka Basins. The dataset is available via the “Data and Publications” page. Each package is a consolidated set of seismic and well data to facilitate new ventures and exploration assessments of frontier basins in South Australia. Data releases for other frontier basins will follow.

Enforcement of Compliance

The compliance and enforcement priorities of the Energy Resources Division are driven by the objectives of the The Petroleum and Geothermal Energy Act 2000. The key concept underlying the enforcement of the Actis that the basic responsibility for detecting and rectifying non-compliance lies with the licensee or individual, not the regulator. A range of enforcement tools are available to the Energy Resources Division for various key requirements of the Act, Regulations, licence conditions and Statement of Environmental Objectives, and are outlined in the Petroleum and Geothermal Energy Act Compliance Policy.

The Compliance Policy is grounded on the principle of an enforcement pyramid, shown in figure 1 below. The type of Enforcement action(s) taken by the Energy Resources Division depends on the seriousness and repetitiveness of the offence(s), in accordance with the policy.

The pyramid details a series of steps and measures available to the Energy Resources Division for facilitating, monitoring and, where necessary, enforcing compliance. The Energy Resources Division aims to maintain its regulatory activities at ‘Step 1: Preventative measures’, shown as the base of the pyramid in Figure 1. In cases where industry fails to adequately and appropriately response to detected noncompliance, ‘Step 2: Persuasive measures’ is instigated. Only in extreme and exceptional cases would the Energy Resources Division expect to utilise Steps 3 and 4, ‘Compulsive’ and ‘Punitive’ measures, respectively, to enforce compliance and achieve acceptable environmental or administrative outcomes. Note, the Energy Resources Division contemplates the concurrent use of compliance measures.

Petroleum and Geothermal Energy Act Annual Compliance Reports

Annual Petroleum and Geothermal Energy Act compliance reports are prepared by the Energy Resources Division for the purpose of:

outlining the compliance monitoring and surveillance activities carried out by the Energy Resources Division during each year for activities regulated under the Petroleum and Geothermal Energy Act 2000; and

providing an overview of the regulatory performance of the petroleum and geothermal industries in accordance with the requirements of the Petroleum and Geothermal Energy Act 2000.

The most recent Petroleum and Geothermal Energy Act compliance report currently available can be seen immediately below:

These annual reports satisfy the requirement to publish information on authorised investigations carried out during the course of a year, as per Section 123 of the Petroleum and Geothermal Energy Act 2000.

Incident Reporting

Under the Petroleum and Geothermal Energy Act 2000 and the Petroleum and Geothermal Energy Regulations 2013, incidents are classified into either Serious or Reportable.

A reportable incident is defined under the Act as an incident arising from activities conducted under a licence in which:

a) An escape of petroleum, a processed substance, a chemical or a fuel that affects an area that has not been specifically designed to contain such an escape;

b) An incident identified as a reportable incident under the relevant Statement of Environmental Objectives.

Regulation 32 outlines the requirements for reporting incidents to the Energy Resources Division. Reportable incidents are to be reported to the Energy Resources Division on a quarterly basis within 1 month after the end of each quarter.

Any serious incident must be reported to Energy Resources Division immediately and then followed up, within three months, by a detailed report explaining the root cause and corrective actions taken to prevent its recurrence. Furthermore the Act requires licensees to take appropriate action to ensure that any long-term damage is avoided (i.e. breach to relevant Statement of Environmental Objectives), and that adequate corrective action is taken to minimise the likelihood of the recurrence of such an incident.

A serious incident is defined under the Act as an incident arising from activities conducted under a licence in which:

d) Security of natural gas supply is prejudiced or an imminent risk of prejudice of natural gas supply arises.

Pursuant to Regulation 12, more specific definitions of events which constitute a serious incident under the broad definition in section 85 of the Petroleum and Geothermal Energy Act 2000 are provided in respective Statement of Environmental Objectives's.

To report a serious incident to ERD, as required by Section 85(2) of the Petroleum and Geothermal Energy Act 2000, licensees should contact the serious incident report number: (08) 8463 6666.

In the event that the number is unattended, record a message and ERD will return the call as soon as practicable.

Guidance Documents

In accordance with good governance principles the Energy Resources Division has articulated its expectations for the various requirements under the Act and Regulations and to that end provides the following guidance documents:

Company Annual Reports

Under Regulation 33 of the Petroleum and Geothermal Energy Regulations 2013, and to ensure the transparency and openness principles of the Petroleum and Geothermal Energy Act 2000 are applied in terms of the performance of the industry, licensees are required to report their level of compliance with the Act and any relevant statement of environmental objectives. The main purpose of this requirement is to ensure licensees assess and review their performance regularly, and through this process proactively take corrective actions where required to rectify any identified deficiencies, and improve their performance on continuous basis. Company annual reports are available on the annual reports page.

For some objectives, which cannot readily be measured through quantitative assessment, particularly in relation to land and vegetation disturbance such as the restoration of well sites and seismic lines, techniques such as Goal Attainment Scaling have been adopted to provide such measurement. Guidelines outlining this process are on Guidelines and Policy.

Fitness-for-purpose Assessments

Section 86A of the Petroleum and Geothermal Energy Act 2000 requires a licensee to carry out fitness-for purpose assessments of their facilities at least once each 5 years. Such assessments must include a statement of the state of the current, and expected (over an ensuing 5 year period), fitness-for-purpose of the facility. The report must also detail the grounds on which the statement was made, including the physical condition of the facility; the effectiveness of management systems for the operation and management of the facility; and any other factors which may adversely affect or compromise the fitness-for-purpose of the facility, including environmental factors and the adequacy and reliability of utilities. The assessments must assess the risks of the facilities on public health and safety; the environment; and the security of supply of natural gas (so far as this maybe relevant). A report on the assessment must be prepared in accordance with Regulation 30 and submitted to the Energy Resources Division.

Copies of Fitness-for-purpose reports and/or a notice of their availability are provided on the Environmental Register.

HSE Management Systems

In June 2006, a number of regulators for the onshore petroleum industry in Australia released a discussion paper (PDF 243 KB) for industry comment on the need for a self-assessment framework for assessing and demonstrating health, safety and environment compliance, primarily focused on the onshore drilling sector.

The objective of this framework is to assist Licensees and their contractors to self-assess the level of effectiveness of their management systems in delivering acceptable health, safety and environment performance, and demonstrate this level to the Energy Resources Division. Results of such self-assessment have so far been very useful in ascertaining the level to which Licensees' health, safety and environment management systems conform to the operator assessment factor requirements of Petroleum Regulation 16. The use of this tool also assists Licensees to identify components of their management systems requiring improvements or enhancements to deliver greater overall system effectiveness. Furthermore, these assessments provide consistency and certainty in the process by which Licensees can achieve and maintain low level supervision (surveillance) status in accordance with Section 74 of the Petroleum and Geothermal Energy Act 2000.

Emergency Response Exercises

A key component of the preventative measures of the Energy Resources Division's compliance and monitoring strategy is to ensure appropriate plans are in place for emergency incidents. Under the Petroleum and Geothermal Energy Act 2000, measures must in particular focus on the prevention of environmental, public safety and security of gas supply incidents. Regulation 31, of the Petroleum and Geothermal Energy Regulations 2013, requires that licensees maintain effective response procedures to be followed in the event of such emergencies. It also requires that these procedures be tested for effectiveness by conducting a practice drill at least once every two years, with a report into the findings of the exercise prepared and provided to the Energy Resources Division. Emergency response exercises are summarised each year in the Petroleum and Geothermal Energy Act Annual Compliance Report available above.

High and Low Surveillance Classification

Section 74 of the Petroleum and Geothermal Energy Act 2000 requires a mandatory licence condition which divides regulated activities carried out under a licence into those requiring 'high level surveillance' by the regulator and those requiring 'low level surveillance'.

Flexibility is one of the key regulatory principles of the Petroleum and Geothermal Energy Act 2000. The Energy Resources Division aims to ensure that the level of intervention needed to ensure compliance is appropriate to the specific company or individual being regulated and the outcomes that need to be achieved.

The degree of regulatory intervention for a specific activity will be dependent on the extent to which a licensee demonstrates its capability to achieve compliance with thePetroleum and Geothermal Energy Act 2000 and Statement of Environmental Objectives relevant to that activity, through implementation of effective management systems and processes, and past compliance record.

As a result of classifying activities to be conducted by each licensee as either low or high surveillance, the most cost effective level of regulatory scrutiny needed to ensure compliance can be selected. To reflect the lower level of surveillance and hence lower cost needed to ensure compliance of low surveillance activities, the Bill allows for up to 50% reduction on annual licence fees for such activities.

Key Difference between High and Low Surveillance

The key difference between a high and low surveillance operator is the extent of regulatory scrutiny given by the regulator in the approval process and the surveillance level of the activities undertaken by the licensees.

High Surveillance Activities

For high surveillance operators (predominately new entrants with no proven track record) the regulatory scrutiny is higher. Activities where a licensee cannot demonstrate a high level of compliance will be classified as high surveillance. For high surveillance activities in addition to establishing, monitoring and enforcing company performance against the environmental objectives, the regulator will also need to assess and monitor on an activity basis the likelihood of the licensee achieving the regulatory objectives and take the appropriate corrective action if required. Before being able to undertake activities, high surveillance licensees are required to provide a notice for activities, which is required to be approved by the Energy Resources Division, and must have work-programs formally approved.

Low Surveillance Activities

Activities for which a licensee demonstrates a high level compliance culture – ability to comply with regulation - will be classified as low surveillance. For these activities the regulatory role will basically involve establishing the environmental objective in consultation with other stake holders; monitoring the achievement of the objectives; facilitating reporting of company performance against those objectives to other stakeholders; and enforcement of company compliance when needed.

More information on the differing requirements of licensee's to provide Activity Notifications are included in Activity Approvals Process.

Determination of the Level of Surveillance

All licensee’s are initially high-level official surveillance operators for all activities, unless specifically classified as a low-level official surveillance operator for specific activities by the Minister.

To assess whether a licensee is able to be granted low level surveillance classification, the Energy Resources Division will consider a number of factors, including the operator assessment factors detailed under Regulation 16 of the Petroleum and Geothermal Energy Regulations 2013. These factors address a number of capabilities in terms of the licensee’s work practices, procedures, systems and resources for achieving compliance. Past demonstrated performance and history of compliance are also necessary for classification as low surveillance.

Low level official surveillance status has been given to a few operators which have extensive experience with the particular activity and operating in a region, and which have demonstrated their capability to continually perform in a manner which achieves the approved Statement of Environmental Objectives and other regulatory requirements.

The criteria used by the Energy Resources Division to assess licence operator assessment factors is outlined in the Guideline for Operator Classification (PDF 103 KB) and is published as required by regulation 17(2) of the Petroleum and Geothermal Energy Regulations 2013.